First up, the good. US outfit Verizon Wireless, in which Vodafone has a 45% stake, has already reported what Marsch called 'stellar' numbers, with 12% earnings growth. By comparison, a weak performance in Europe has been well flagged, so it's unlikely that analysts will be really shocked by what they see.

Bad-wise, Marsch said if the trading update shows a decline back into an organic revenue decline then investors should brace themselves for a further deterioration in the rest of the year.

In terms of the ugly, Marsch cited his expectation of a 10.1% decline in first-half revenue. Stripping out the effects of currency movements would reduce this by 2.5% to 3.0%, he said, but 'it is not going to look pretty'.

Nonetheless, Marsch said the shares remain a 'buy'. 'We think that relative to the results of other European telcos, Vodafone’s numbers will look okay, at least in
organic terms, and even better if we look at Vodafone’s proportionate numbers, including its share of Verizon Wireless’s 7.5% service revenue growth and 12% year-on-year earnings growth.'

Shares in the group closed at 167.75p on Wednesday, down 1.25p or 0.74%.

Seymour Pierce warns Kingfisher's business model needs refurbishment

Kate Calvert, analyst at Seymour Pierce, has downgraded her forecasts for DIY store owner Kingfisher (KGF.L), saying the group is ill-prepared for the shift towards internet retailing.

Calvert said Kingfisher, whose brands include B&Q and Screwfix, has done well to double French and UK earnings over the past five years, and also managed to sell its Italian operations at the peak of the market.

However, she said its format of big, warehouse-like shops isn't right for today's shoppers. 'Kingfisher has too much space for a multi-channel society. Its stores are too large, difficult to shop and not aligned to the new trend for convenience,' she said.

'The company faces cannibalisation from the development of the internet, erosion from the trend to DFM (Do-It-For-Me) and from the growing homewares sub-sector in the UK.'

Calvert's 2013 pre-tax profit forecast falls from £740 million to £710 million, which compares with a consensus estimate of £870 million at the beginning of the year. She retains a 'sell' recommendation.

Shares in the group, which feature in the Citywire Selection star pick Fidelity Special Situations fund, closed at 290.8p on Wednesday, down 0.9p or 0.31%.

JP Morgan cuts target price for Weir Group

Andrew Wilson, analyst at JP Morgan, has cut his target price for industrial pump maker Weir (WEIR.L), warning that weak orders in the minerals division will suppress the overall numbers in the year ahead.

Weir's third-quarter results revealed mixed results: although the group remains on track to deliver pre-tax profits of £440 million-£450 million, orders in the minerals division, which supplies mining and oil sands companies, were flat year-on-year.

'The downturn in order inflow for the minerals division has been more rapid than previously expected. Our estimates for 2012 are unchanged. However, we are reducing our sales and operating profit forecasts for the Minerals division for 2013,' Wilson said.

'We have reduced our group revenue forecast by 4% resulting in 2013 earnings per share of 140p, a 4% cut.' The analyst's target price falls from £18.95 to £18.31.

Canaccord cuts target price for Fenner on margin pressure

In the year ended 31 August revenues rose 16% to £830.6 million, and underlying pre-tax operating profits were up 30% to £103.9 million, ahead of O'Brien's forecast of £100 million.

'We retain our view that Fenner is a business which has undergone significant
qualitative and balance sheet improvement. Engineered Conveyor Solutions (ECS) has increasing shifted into service, support and replacement, whilst Advanced Engineered Products (AEP) has continued to develop a number of attractive niches,' the analyst said.

However, he warned that margins in the ECS division are set to fall in the year ahead, and he also cited 'small pockets of destocking' in the AEP division. The analyst's target price falls from 549p to 471p, and he retains his 'buy' recommendation.

First up, the good. US outfit Verizon Wireless, in which Vodafone has a 45% stake, has already reported what Marsch called 'stellar' numbers, with 12% earnings growth. By comparison, a weak performance in Europe has been well flagged, so it's unlikely that analysts will be really shocked by what they see.

Bad-wise, Marsch said if the trading update shows a decline back into an organic revenue decline then investors should brace themselves for a further deterioration in the rest of the year.

In terms of the ugly, Marsch cited his expectation of a 10.1% decline in first-half revenue. Stripping out the effects of currency movements would reduce this by 2.5% to 3.0%, he said, but 'it is not going to look pretty'.

Nonetheless, Marsch said the shares remain a 'buy'. 'We think that relative to the results of other European telcos, Vodafone’s numbers will look okay, at least in
organic terms, and even better if we look at Vodafone’s proportionate numbers, including its share of Verizon Wireless’s 7.5% service revenue growth and 12% year-on-year earnings growth.'

Shares in the group closed at 167.75p on Wednesday, down 1.25p or 0.74%.

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Seymour Pierce warns Kingfisher's business model needs refurbishment

Kate Calvert, analyst at Seymour Pierce, has downgraded her forecasts for DIY store owner Kingfisher (KGF.L), saying the group is ill-prepared for the shift towards internet retailing.

Calvert said Kingfisher, whose brands include B&Q and Screwfix, has done well to double French and UK earnings over the past five years, and also managed to sell its Italian operations at the peak of the market.

However, she said its format of big, warehouse-like shops isn't right for today's shoppers. 'Kingfisher has too much space for a multi-channel society. Its stores are too large, difficult to shop and not aligned to the new trend for convenience,' she said.

'The company faces cannibalisation from the development of the internet, erosion from the trend to DFM (Do-It-For-Me) and from the growing homewares sub-sector in the UK.'

Calvert's 2013 pre-tax profit forecast falls from £740 million to £710 million, which compares with a consensus estimate of £870 million at the beginning of the year. She retains a 'sell' recommendation.

Shares in the group, which feature in the Citywire Selection star pick Fidelity Special Situations fund, closed at 290.8p on Wednesday, down 0.9p or 0.31%.

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Please sign in or register to comment. It is free to register and only takes a minute or two.

JP Morgan cuts target price for Weir Group

Andrew Wilson, analyst at JP Morgan, has cut his target price for industrial pump maker Weir (WEIR.L), warning that weak orders in the minerals division will suppress the overall numbers in the year ahead.

Weir's third-quarter results revealed mixed results: although the group remains on track to deliver pre-tax profits of £440 million-£450 million, orders in the minerals division, which supplies mining and oil sands companies, were flat year-on-year.

'The downturn in order inflow for the minerals division has been more rapid than previously expected. Our estimates for 2012 are unchanged. However, we are reducing our sales and operating profit forecasts for the Minerals division for 2013,' Wilson said.

'We have reduced our group revenue forecast by 4% resulting in 2013 earnings per share of 140p, a 4% cut.' The analyst's target price falls from £18.95 to £18.31.

Shares in the group closed at £17.80 on Wednesday, down 44p or 2.41%.

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Canaccord cuts target price for Fenner on margin pressure

In the year ended 31 August revenues rose 16% to £830.6 million, and underlying pre-tax operating profits were up 30% to £103.9 million, ahead of O'Brien's forecast of £100 million.

'We retain our view that Fenner is a business which has undergone significant
qualitative and balance sheet improvement. Engineered Conveyor Solutions (ECS) has increasing shifted into service, support and replacement, whilst Advanced Engineered Products (AEP) has continued to develop a number of attractive niches,' the analyst said.

However, he warned that margins in the ECS division are set to fall in the year ahead, and he also cited 'small pockets of destocking' in the AEP division. The analyst's target price falls from 549p to 471p, and he retains his 'buy' recommendation.

Shares in the group closed at 361.5p on Wednesday, up 11.5p or 3.29%.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

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